Circle Stock Dumps 15% As Visa, Stripe Back Rival OUSD

Key Insights

• Circle stock dumps after launch of new Stablecoin consortium
• The consortium includes Visa, Stripe, Mastercard, BlackRock, BNY, Coinbase, Ripple, Google, Shopify, Bybit, OKX, and Solana.
• Circle ceo says the move shows that stablecoins are essential for the future of payments

technology firms announced they had joined Open Standard, a consortium developing a new stablecoin called Open USD (OUSD).

Following the announcement, Circle’s CRCL shares dropped about 15% to $64. Investors appeared to weigh how the new consortium could affect Circle’s enterprise stablecoin business, where USDC has established a strong position.

More Than 140 Companies Back OUSD

According to Open Standard’s announcement, OUSD is a stablecoin built for the Internet economy. It noted that OUSD allows businesses to mint and redeem the stablecoin for free.

Partners also retain earnings in Open USD reserves, excluding the Open Standard management fee. The stablecoin governance will also be controlled by Open Standard through a board composed of business partners to ensure decisions align with collective interests.

Zach Abrams, the founder of Stablecoin infrastructure company Bridge, which was acquired by Stripe last year, is the founding CEO.

Over 140 businesses have already signed up to use OUSD, including Visa, Stripe, Coinbase, BlackRock, Google, Ripple, Standard Chartered, and Solana.

With Open Standard business partners cutting across every industry, from crypto to payments to financial services and tech companies, there are concerns that USDC adoption could suffer, especially as it also targets these enterprise users.

Circle revenue, which comes mostly from reserve interest, could also be threatened by the new stablecoin that allows partners to keep reserve interests.

Coinbase is Circle’s largest distribution partner, with the exchange receiving $908 million in 2024 for distributing USDC. It is unclear how this relationship will work now that Coinbase is a partner on OUSD.

Meanwhile, Stripe has already said that OUSD will become the default stablecoin for businesses on its platform. The stablecoin is expected to go live later this year.

Circle CEO Says OUSD Launch Proves Stablecoin is the Future

Circle CEO Jeremy Allaire has welcomed the launch of OUSD, noting that continued innovation and competition are a good development. In a tweet, Allaire stated that stablecoin is one of the “largest market opportunities in the world” and USDC is positioned to take advantage.

He noted that the stablecoin is the most widely adopted by institutions, with thousands of partners across various industries. Circle plans to grow its ecosystem while expanding how its partners can become economic stakeholders in USDC growth.

Meanwhile, Tether CEO Paolo Ardoino simply posted “Welcome OUSD. Player 2 has entered the game,” on X (formerly Twitter).

Tether USDT remains the largest stablecoin, with a circulating supply of over $180 billion and more than 500 million users. However, the stablecoin primarily targets retail users, with the majority of its users outside the US and EU markets.

The post Circle Stock Dumps 15% As Visa, Stripe Back Rival OUSD appeared first on The Market Periodical.